Middle East

Iran more than doubles defence budget

A handout picture released by the Iranian president's official website shows Iranian President Mahmoud Ahmadinejad (L) welcoming Secretary General of the Palestinian Islamic Jihad, Ramadan Abdullah Shalah (R), upon his arrival for a meeting in Tehran on February 1, 2012. AFP PHOTO/HO

TEHRAN: Iran plans to more than double military spending over the coming 12 months, according to an annual budget proposal by President Mahmoud Ahmadinejad presented to parliament and announced on his official website on Thursday.

"In the area of defence, there is a 127 percent increase," Ahmadinejad said in his statement to lawmakers.

He gave no monetary figure for the increase, nor any indication on how it would be spent.

Iran's official defence budget for the current fiscal year -- which ends in mid-March -- is around $12 billion, on top of which parliament has authorised a $3 billion extension.

The announced increase in military spending comes at a time of high international tensions over Iran's nuclear programme, which the West and Israel suspect includes a drive to develop atomic weapons.

Speculation has mounted in recent weeks that Israel is contemplating air strikes on Iran's nuclear facilities, possibly sparking a wider conflict that could draw in the United States and European allies.

Iran, which maintains its nuclear activities are peaceful, has warned it could close the strategic Strait of Hormuz in the Gulf, through which a third of global marine oil traffic passes, if it is attacked.

The Islamic republic is subject to UN sanctions limiting arms imports. However it has a considerable domestic military industry that develops its own weapons, including cruise and ballistic missiles.

Ahmadinejad on Wednesday presented his budget proposal to parliament.

It foresees a total budget of 5.1 quadrillion rials, or $443 billion at the government's official budget exchange rate of 11,500 rials per dollar.

That makes the budget roughly the same in rials as for the current Iranian fiscal year -- but $40 billion less when expressed in dollars because of an official devaluation of the rial over the past year.

The budget not only encompasses government spending and revenue but also those of Iran's vast sector of state companies that dominate the country's economy.





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